New York, NY – Feb. 19, 2019 – The National Advertising Division recommended that AT&T Services, Inc. discontinue or modify claims that consumers should switch to AT&T’s internet service to “get rid of fees,” following a challenge by Comcast Cable Communications, Inc., a provider of competing broadband service.

NAD is an investigative unit of the advertising industry’s system of self-regulation and is administered by the Council of Better Business Bureaus.

The challenged claims, which appeared in television, radio, and internet advertising, included:

Express Claims:

• Get Rid of Fees.
• Unlike cable providers, with AT&T Internet the Price you See is the Price you Pay.
• Unlike cable, with AT&T Internet you won’t see extra monthly fees on your internet bill.
• Unlike cable, get equipment included and no extra monthly fees on our 100% fiber network.

Implied Claims:

• Comcast’s advertising includes price offers that are misleading
• Comcast deceives consumers by charging fees that are “hidden” from consumers.

AT&T’s television commercial plays on the fairy tale Jack and the Beanstalk, with a giant saying “fi fo fum” rather than “fee fi fo fum.”  Jack replies, “Oh right.  I guess he decided to…GET RID OF FEES.”  Text reading “GET RID OF FEES” follows.  A voiceover then states, “unlike cable providers, with AT&T Internet, the price you see is the price you pay,” accompanied by similar onscreen text.  The voiceover continues, “$40 a month, no extra monthly fees, no surprises, the end.”  A final onscreen disclosure reads, “$40 AT&T INTERNET PER MONTH PLUS TAX UP TO 100 MBPS.”  A similar Jack and the Beanstalk-themed radio commercial also uses the “get rid of fees” dialogue, and states “Unlike cable, with AT&T Internet, you won’t see extra monthly fees on your Internet bill.”  Additionally, website panels promoting AT&T’s internet service state, “The price you see is the price you pay.”

AT&T argued that its advertising limited the claim to getting rid of monthly equipment fees.  The parties agreed that AT&T does not charge monthly fees for internet equipment, but that cable companies typically do.  NAD observed, however, that the television commercial focuses on the claim, “get rid of fees,” and closes with “the price you see is the price you pay.” NAD noted that all AT&T internet packages are subject to other fees such as an installation fee, activation fee, early termination fee, and data overage charges. As such, NAD concluded, the commercial reasonably conveys the message that AT&T charges no fees at all and that the advertised offer price is the total monthly bill.  NAD further determined that the AT&T’s radio advertisement, with its main claim “get rid of fees,” and its internet advertisements which its “price you see is the price you pay” language, similarly reasonably convey the message that the price is inclusive of fees and other ancillary charges.

Most of the challenged advertising promotes an internet package priced at $40 per month which requires AT&T customers to subscribe to at least one other AT&T service – television, telephone, or cellular service – in order to get internet service for the advertised price. AT&T Internet, standing alone, is $60 per month.  AT&T Internet customers pay a small monthly fee (the state cost recovery fee) and are also subject to non-monthly fees such as an installation fee, activation fee, early termination fee, and data overage charges—all of which, NAD concluded are fees that customers may reasonably understand they will avoid when AT&T offers consumers the opportunity to “get rid of fees.”  As a result, NAD found that the absolute language of the advertising, such as “get rid of fees” and “the price you see is the price you pay,” reasonably conveys the unsupported message that AT&T has eliminated fees altogether.

NAD also found that, given the broad language used in the challenged advertising—notably, the claim, “the price you see is the price you pay”—consumers may also reasonably take away the implied message that AT&T has included taxes in the list price, but which are in fact charged to consumers.

Considering whether AT&T’s disclosures advising consumers about the fees charged are effective, NAD concluded that they were neither clear nor conspicuous and are inconsistent with claims that offer to “get rid of fees” – categorical language that reasonably conveys the message that fees are eliminated without limitation.

NAD therefore recommended that AT&T discontinue or modify the claims, “Get Rid of Fees,” “Unlike cable providers, with AT&T Internet the Price you See is the Price you Pay,” “Unlike cable, with AT&T Internet you won’t see extra monthly fees on your internet bill,” and “Unlike cable, get equipment included and no extra monthly fees on our 100% fiber network” to avoid conveying that it charges no fees and that its price is all-inclusive.  NAD stated that nothing in the decision, however, prevents AT&T from touting that it, unlike cable companies, does not charge monthly equipment fees for internet service.

In its advertiser’s statement, AT&T stated that it will comply with NAD’s decision and take NAD’s recommendations into account in developing future advertising, although it disagreed with NAD’s finding that the challenged advertising did not sufficiently clarify that the “no more fees” claim was limited only to equipment. AT&T also thanked NAD for its review of this matter.

Note: A recommendation by NAD to modify or discontinue a claim is not a finding of wrongdoing and an advertiser’s voluntary discontinuance or modification of claims should not be construed as an admission of impropriety. It is the policy of NAD not to endorse any company, product, or service. Decisions finding that advertising claims have been substantiated should not be construed as endorsements.

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About Advertising Industry Self-Regulation:  The Advertising Self-Regulatory Council establishes the policies and procedures for advertising industry self-regulation, including the National Advertising Division (NAD), Children’s Advertising Review Unit (CARU), National Advertising Review Board (NARB), Electronic Retailing Self-Regulation Program (ERSP) and Online Interest-Based Advertising Accountability Program (Accountability Program.) The self-regulatory system is administered by the Council of Better Business Bureaus.

Self-regulation is good for consumers. The self-regulatory system monitors the marketplace, holds advertisers responsible for their claims and practices and tracks emerging issues and trends. Self-regulation is good for advertisers. Rigorous review serves to encourage consumer trust; the self-regulatory system offers an expert, cost-efficient, meaningful alternative to litigation and provides a framework for the development of a self-regulatory solution to emerging issues.

To learn more about supporting advertising industry self-regulation, please visit us at: www.asrcreviews.org.